The objective of financial reporting is to provide financial information that is useful to investors in making decisions. It is important that the financial information provided to those investors is communicated effectively.
Now that the Board's work on a number of major projects has come to an end, investors have asked us to refocus our activities on projects designed to make financial information more relevant to them and improve the communication of that information.
They told us that at present, valuable information is often hidden by ‘boiler-plate’ disclosures and that financial information is often poorly presented. It can be difficult and time-consuming for investors to identify the most useful information from amongst all the information that is disclosed. The Board wants to make the communication of financial information more effective and, hence, Better Communication in Financial Reporting will be a theme underlying much of our work for the next few years.
The Board has identified several projects that it will develop to support better communication. Those projects include the projects previously grouped under the heading Disclosure Initiative.
In October 2017 the Foundation published a case study report called Better Communication in Financial Reporting—Making disclosures more meaningful, showing how companies from different parts of the world have improved communication in their IFRS financial statements.
|Primary Financial Statements||This research project is examining potential targeted improvements to the structure and content of the primary financial statements with a particular focus on the statement(s) of financial performance and the statement of cash flows.|
|Disclosure Initiative—Principles of Disclosure||
The Board has published a Discussion Paper that suggests principles governing what, how and where information should be disclosed in the financial statements to improve the information provided to users of financial statements.
The Discussion Paper seeks public feedback on disclosure issues the Board has identified through outreach as well as its preliminary proposals to resolve these issues. Ultimately, it is expected that the Discussion paper could lead to amendments to IAS 1 Presentation of Financial Statements—the Standard covering general disclosure requirements—or the development of a new general disclosure Standard.
|Disclosure Initiative—Targeted Standards-level Review of Disclosures||The targeted standards-level review of disclosures project is improving the way the Board develops and drafts disclosure requirements in order to improve the usefulness of disclosures provided for the primary users of financial statements.
|Disclosure Initiative—Definition of Material||The Board proposes to clarify and align the definition of 'material' and provides guidance to help improve consistency in the application of that concept whenever it is used in IFRS Standards.
|Management Commentary||The management commentary project is revising and updating the IFRS Practice Statement 1 Management Commentary by considering how management commentary provided outside the financial statements could better complement and support the financial statements.
|IFRS Taxonomy||The Board will focus on a number of areas: